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Making the Affordable Care Act Work

In Washington, there are a few axioms on which almost everyone (Rs and Ds alike) can agree. Don’t hold events in August. If the meeting is important, take a cab, not the metro. Social media can be dangerous. And of course, no law is perfect.

The biggest law of the last decade, the Patient Protection and Affordable Care Act (a.k.a. “ACA” or “Obamacare” or “President’s Health Law”, and so on) is certainly a good example of the latter. The bill’s authors, President Obama, and more than just a few Congressional Republicans can agree on that. But that is no different than any other major policy change – they all undergo a period of fixes, tweaks, and changes usually addressing unintended consequences. Blame it on the nature of compromise, the mistakes of over-worked underpaid Hill staffers, or, I kid you not, typos.

If you read recent communications (or belong to the healthcare committee!) you will see that WIPP is supporting some of these changes to benefit women entrepreneurs. In our view, Obamacare is the law of the land* – but that doesn’t mean we cannot change it. Here are the tweaks we have supported recently:

Full Time is 40 Hours – Not 30

The Issue: Obamacare defined a full-time worker as working thirty hours a week. The definition matters for defining whether a business is exempt from the employer mandate (under 50 FTEs is exempt – yes, you have to add in part time employees, but good news: calculator). Just a refresher: if you have more than 50 FTEs and don’t offer health insurance, you may face penalties.

WIPP’s Position: A workweek is a workweek. Dolly Parton sang 9 to 5, not 10 to 4. The law used a thirty-hour definition in an effort to make the math (i.e. $$$) work. In addition, it was a tool to increase the number of low-hour workers that might receive employer-sponsored coverage. While increasing coverage is laudable, it should not have come at the expense of an arbitrary definition at odds with working America. The Obama Administration signaled opposition to the bill because it could undo some of the coverage gained in the past years. Whether or not this is true (wonks on both sides agree, the change would have little impact either way), the principle of the matter is simple: traditional definitions should not be upended on a whim. An American workweek is forty hours. Part-time workers, who also need coverage, should be addressed, but separately.

Bring Back HRAs

The Issue: Some very technical guidance from the IRS last fall removed a simple way for employers to help employees pay for health insurance premiums. Basically, a Health Reimbursement Arrangement, or HRA, let the employee find their own insurance and employers could reimburse employees at their discretion.

The Fix: Two options. One, the IRS could admit this was a bone-headed move and put out new guidance. Unlikely. Two, a few bills in the past Congress would allow HRAs to be allowed for businesses with fewer than 50 employees. WIPP is working with those offices in the new Congress. More to come.

WIPP’s Position: If it ain’t broke, don’t fix it. It worked in the past, now it’s broken. Someone should fix this (so to sum up: it wasn’t broken, the ACA broke it, now it needs a fix). HRAs can be a good part of a solution that gets more people covered. Often business owners look for the path of least resistance – for some businesses, HRAs can be that path. While WIPP reviews every comma of legislation before endorsing, WIPP would likely back legislation that made this change.

Expand Eligibility for the Small Business Tax Credit

The Issue: One of the small business carrots in Obamacare was the Small Business Health Care Tax Credit. But this carrot came with a lot of strings attached (mixed metaphors?). Currently, the tax credit is only available to businesses with fewer than 25 employees and average wages of less than $50,000. Moreover, to receive the full tax credit, which covers up to 50% of employer-paid premiums, businesses must have 10 or fewer employees and average wages of up to $25,000.

The Fix: Expand eligibility for the tax credit. Under the Small Business Tax Credit Accessibility Act, these restrictions would be relaxed to make businesses with up to 50 employees and average wages of up to $80,025 eligible for the tax credit. Additionally, it would extend the number of consecutive years a small business can claim the tax credit from two (current law) to three years. It also removes the requirement that employers claiming the credit contribute the same percentage of the cost for each employee’s health insurance.

WIPP’s Position: WIPP supports the bill. All these efforts stem from the idea that small businesses need help to provide coverage. Accessing that help should be easy, and not limited to a few businesses. We’ve heard from business owners nationwide saying that they simply don’t qualify under these strict requirements.

In a law that in size 8 font is nearly 1,000 pages, with thousands more in regulations**, there are more than three needed fixes. These are a few where WIPP members’ experiences drove us to advocate for these changes. Please let us know if any law is adversely affecting your business. It’s what we are here for.

*The Supreme Court is currently reviewing substantial portions of the law. Depending on their decision, this could all be a moot point.

**WIPP recently visited with Majority Leader Mitch McConnell’s office, which keeps a stack of the regulations, in case you wanted a visual.

John Stanford is part of WIPP’s Government Relations team in Washington, D.C., specializing in federal procurement and healthcare policy. When not bothering lawmakers about needed changes, he can be found in the woods at local golf courses.